I have been thinking a lot lately about character traits that are import for successful traders to have and live out. There are many but I will use this post to discuss the one that I have come to regard as the highest and most important of them all.
Before I go any further, you should answer this question for yourself…
What is the most important character trait of the people I see as successful traders?
And then maybe an add on question for those that can stomach it:
Do I have that?
That’s the one that will sting probably.
I want to spend a few lines talking about the one that I see as most important. It’s simply this:
The ability to defer gratification
Simple right? Don’t eat that second doughnut. Don’t drink the second beer. Don’t have the desert and the soda.
It sounds simple but it instant gratification is one of the single biggest killers of a trading accounts I have ever come in contact with. It devours good traders and leaves them to rot.
Why? So what if I have that second doughnut? That is not my trading problem…
I can hear it now.
Well, then why do you trade so much? For the “action”? Hit a blackjack table. It’s funner and your money will go slower.
Why do you over risk? For the money? Then get a high paying job because trading won’t satisfy that itch right away. Over time it will, but not today.
If only you would realize that your mind is your greatest trading indicator…
You have to wait for it and work for and learn to control it and master the urge to trade and the urge to make money. You have to put the second doughnut in front of your face, right on your desk all day and stare at it and learn that the urge doesn’t control you, you control it.
Need more money? Stop spending so much. Defer the gratification until you make that amount in your trading account.
Being able to control the actions, and more importantly the EMOTIONS behind those actions is the single most important character trait of a trader.
I will forever compare trading to the farmer. I grew up in an agricultural background and know what it takes to get crops in. Instant gratification does not work when growing things. What are you going to do? Plant the seed and rip it up because it isn’t growing fast enough? No, at least I hope not. “Well I know the wheat plant that grows from this seed is what will feed me but I’m hungry now. I will dig up the seed and eat it.”
Ok. But you have killed that plant, but more importantly, you have killed any of the seeds that would have grown next years crop.
I grow a small vegetable garden every year to remind me about how the process works. Maybe you should too.
Also, Pressfield talked about the marshmallow experiment in Turning Pro. Look it up if your interested.
Wait for the good. It takes time to develop.
Have a great day